Interest Rate: The Last Six Months
Of Federal Activity

About

This Report

This is a computer-generated report that shows all of the federal activity with respect to the keyword "Interest Rate" over the last six months. This is a demonstration of the power of our government relations automation software.

Hansard

House: 57 Speeches
Senate: 9 Speeches

House Senate

Bills

Active: 0

Regulations

Filed: 0
Proposed: 0

The House

Matthew Dubé (NDP)

May 11th
Hansard Link

Business of Supply

“...here.

What we heard during the last election campaign was a proposal to take advantage of low interest rates to help municipalities and the provinces to capitalize on that reality and invest pub...”

Alain Rayes (Conservative)

May 11th
Hansard Link

Business of Supply

“...d to go looking for financing, because we all have access to funding through municipal bonds, at an interest rate of less than 2%, and the federal government and the provinces are also able to do this...”

Richard Cannings (NDP)

May 11th
Hansard Link

Business of Supply

“...of British Columbia found that provincial taxpayers were on the hook for about $31 million in extra interest rates on one project alone, the Fort St. John Hospital, representing the private equity in the project borrowed at an interest rate of 14.79%. This led one journalist to wonder if the B.C. Liberals had put the charge o...”

Richard Cannings (NDP)

May 11th
Hansard Link

Business of Supply

“...al way government does business, through the government providing monies that it could get with low interest rates if it needed to borrow. It has nothing to do with a Canada infrastructure bank that i...”

Elizabeth May (Green Party)

May 11th
Hansard Link

Business of Supply

“...ole for infrastructure and the infrastructure bank if its purpose is to access financing at a lower interest rate than that available, even in municipalities. This is a valid purpose. My concern is th...”

Sean Fraser (Liberal)

May 11th
Hansard Link

Business of Supply

“...ing such serious and substantial investments. Right now we live in a time that has historically low interest rates. Money has never been cheaper in the history of currency. At the same time, we are co...”

Robert Aubin (NDP)

May 11th
Hansard Link

Business of Supply

“... have to admit that it made sense at the time. The Liberals also said that in light of the very low interest rates at the time, they would take advantage and run up a small deficit. I think that Canadians bought into that. The proof is that the Liberals are in government. Let us take advantage and invest in the infrastructure needs of voters while interest rates are at their lowest because it will cost less for all Canadians. The principle is easily understood.

Now, they are introducing an infrastructure bank that does the exact opposite. Instead of taking advantage of low interest rates, the Liberals are going to hand it over to the private sector, which only has one obj...”

Mike Lake (Conservative)

May 5th
Hansard Link

Government Orders

“...ears over that course of time. The results of those deficits, of course, in the mid-1980s were that interest rates were so high in Canada and employment was a challenge in Canada. If we look at the re...”

Dan Albas (Conservative)

May 4th
Hansard Link

Government Orders

“...e small people, but it is worse than that. The ones who are going to be charging prohibitively high interest rates so that they can get the return are going to be these high finance international fina...”

Angelo Iacono (Liberal)

May 4th
Hansard Link

Government Orders

“...res for families, innovation, efficiency, and infrastructure. By making major investments now while interest rates are low, we can build a solid foundation for a prosperous, green future full of possi...”

Alexandre Boulerice (NDP)

May 4th
Hansard Link

Government Orders

“... being created. The Liberals said during the election campaign, and are still repeating today, that interest rates are low, so it is a good time to borrow to invest, and that we need new infrastructur...”

Alexandre Boulerice (NDP)

May 3rd
Hansard Link

Government Orders

“...gn, the Liberal Party kept saying, and rightly so, that it was a good time to borrow money, because interest rates were low.

What the Liberals never told us, however, was that two-thirds of the money used to pay for our infrastructure would come from private investors, who would ask for rates of return from around 7% to 9%, even for public infrastructure.

Why did the minister change the Liberal Party's strategy? Why was it talking about borrowing money at the low interest rate of 2% if it now intends to fill its friends' pockets, on the backs of taxpayers, with ...”

Bill Morneau (Liberal)

May 3rd
Hansard Link

Government Orders

“...simple.

In addition, we believe that it is very important to do more with our investments. If interest rates are very low, then it is a good idea to include pension funds and institutional funds in our investments. We are sure to find an interest rate that is much lower than those cited by the hon. members. That will be our plan. We wil...”

Alexandre Boulerice (NDP)

May 3rd
Hansard Link

Privilege

“... we were experiencing a deficit in infrastructure in our country, and we agreed. They said that the interest rates were so low that this was time for the government to get some money from the market at 2% interest, which is a really low rate, and to take the opportunity to invest in our communities and build new infrastructure. It looks good and seems logical.

However, the big player in this bank will be the private sector, which is there to make profits, to make money, not to serve the public. Instead of borrowing at 2%, we will have private investors asking for profits of 7%, 8%, 9% per year. It will be the taxpayers who will pay for that. Infrastructure will cost more at the end. Also, during that time, we can expect a lot of new fees in order to drive on a highway, or to go to the airport, or to cross a bridge, if the airports are still public, which we are not quite sure of right now. The government will probably sell the airports to start its bank. (1655) [Translation]

One aspect of this budget implementation bill that worries us is the creation of the infrastructure investment bank. During the election campaign, the Liberals talked about an infrastructure deficit and said that investments were needed. We agreed. Interest rates were low, so it was a good time to borrow and it would not be too costly for the gove...”

Pierre Poilievre (Conservative)

May 2nd
Hansard Link

Oral Questions

“...lated how much taxpayers could lose if a market correction causes home prices to go down, or higher interest rates cause mortgage defaults to go up?”

Joël Godin (Conservative)

April 4th
Hansard Link

The Budget

“... that budgets balance themselves. Better yet, he said it was the right time to borrow money because interest rates were low. He is not wrong, but what are we going to do when the interest rates go up? There is no money left. We have our Prime Minister to thank for that.

Th...”

Gérard Deltell (Conservative)

March 23rd
Hansard Link

The Budget

“...g budget, that “the federal debt is out of control” and that we are lucky we currently have low interest rates. However, sooner or later, interest rates are likely to rise and each percentage point increase means an extra $6 billion or $7...”

Dave Van Kesteren (Conservative)

March 23rd
Hansard Link

The Budget

“... is not only adding but adding at an alarming rate. The fact is that today we have historically low interest rates. We know that these rates will not continue. As a matter of fact, they are manipulated. Therefore, I wonder if he could expound, and he did that to some degree, and give a really clear picture to this House, and especially to the Liberal government, of just how critical that is and what that would mean if the interest rate were to rise by one point, let alone two or three.”

Alexandre Boulerice (NDP)

March 21st
Hansard Link

Business of Supply

“...hetoric during the election campaign. They said it was time to invest in our infrastructure because interest rates were low. They ranged from about 2% to 2.5%. It does not cost much to borrow money to...”

Pierre Nantel (NDP)

March 21st
Hansard Link

Business of Supply

“...day's topic. The government says it plans to borrow money for major infrastructure projects because interest rates are so low, but it is approaching lenders that want returns on the order of 7%, 8%, o...”

Pierre Poilievre (Conservative)

March 9th
Hansard Link

Oral Questions

“...d in modern times,” with a 12% increase in spending over this period. It goes on to say:

If interest rates increase or economic growth further weakens relative to planning assumptions, young p...”

Pierre-Luc Dusseault (NDP)

March 7th
Hansard Link

Business of Supply

“...with them, they typically negotiate deals to pay back the money they owe to society at preferential interest rates while avoiding penalties and fines that could, at the very least, serve as a warning ...”

Pat Kelly (Conservative)

March 7th
Hansard Link

Adjournment Proceedings

“... would have heard from many witnesses that the new rules will reduce competition, leading to higher interest rates and fewer options for Canadian consumers.

He would have heard from Michael Lloy...”

Pat Kelly (Conservative)

March 7th
Hansard Link

Adjournment Proceedings

“...he same government that is running an absolutely out of control deficit, has in this House used low interest rates as a justification for doing so, and is lecturing homebuyers about the risks of credi...”

Dan Albas (Conservative)

February 13th
Hansard Link

Private Members' Business

“...ailable to flow into other sectors of the local community lending portfolio. In turn, it means that interest rates will need to be higher. (1125)

All of this drives up costs on a credit union a...”

Robert Aubin (NDP)

February 13th
Hansard Link

Private Members' Business

“..., and wealthy families. The working class only had access to loan sharks, which charged prohibitive interest rates. To address this injustice, Alphonse Desjardins created a system where the working cl...”

Dan Albas (Conservative)

February 9th
Hansard Link

Oral Questions

“...for those who want to refinance their homes. These changes have resulted in Canadians paying higher interest rates when refinancing their mortgage. These changes were imposed with zero consultation.

Why are the Liberals hurting struggling Canadian homeowners by hiking their interest rates?”

Guy Caron (NDP)

February 6th
Hansard Link

Private Members' Business

“...dren increasingly are incorporated, since incorporation carries several advantages, including lower interest rates when they borrow and less tax on the amount to be paid to the parents.

I know t...”

Dan Albas (Conservative)

February 3rd
Hansard Link

Statements by Members

“...cess their equity, the costs of doing that are going to greatly increase as a result of much higher interest rates.

At committee we heard that Canadians refinance for many reasons: to invest in ...”

Dan Albas (Conservative)

December 13th
Hansard Link

Government Orders

“... securities. The Fed had begun the purchases the previous September in order to push down long-term interest rates and encourage private lending; their end would mean higher yields on longer-maturity ...”

Larry Maguire (Conservative)

December 12th
Hansard Link

Private Members' Business

“...the pain of selling assets that have seen extreme swings in the financial markets.

Due to low interest rates and the sluggish economy, investments are not growing nearly as fast as they once were. For example, on long-term Government of Canada bonds, the interest rate has fallen from 8.5% to 3.1%, which is not that good a return when calculating inflati...”

Tom Kmiec (Conservative)

December 12th
Hansard Link

Private Members' Business

“...inty it builds into a person's planning for those last 20 to 30 years of life.

Because of low interest rates and increased longevity, RRIF mandatory withdrawals have an immense impact as shown b...”

Dan Albas (Conservative)

December 6th
Hansard Link

Government Orders

“...rd projects of the magnitude they are discussing? Guess what? They will all get to pay for the high interest rate of return, for those few who can.

People can understand why wealthy foreign nati...”

Anthony Housefather (Liberal)

December 6th
Hansard Link

Government Orders

“...e. While we are now in a position where we have the lowest debt ratio of any country, and with low interest rates, this is indeed the time to spend. It is not always like that, but this is the time.<...”

Tom Kmiec (Conservative)

December 6th
Hansard Link

Government Orders

“...putting them at a greater risk of distressed home sales and personal bankruptcies in the event that interest rates go up.” We know that eventually interest rates will have to go up and Canadians will be paying more every single month to then servi...”

Kyle Peterson (Liberal)

December 6th
Hansard Link

Government Orders

“...ed because we have the lowest debt-to-GDP ratio of all G7 countries. Couple this with the fact that interest rates are very low. Now is the time to make strategic investments in things like better roa...”

Pierre Nantel (NDP)

December 6th
Hansard Link

Government Orders

“...nce the banks to treat their clients like civilized people and not to charge ridiculous credit card interest rates as they are doing now? This would have been a perfect opportunity to do that. Not onl...”

Pierre Nantel (NDP)

December 6th
Hansard Link

Government Orders

“... What is more, the Liberals do not even have the guts to deal with the real problem, the exorbitant interest rates on credit cards. It gets even better. They are giving our infrastructure and great re...”

Francesco Sorbara (Liberal)

December 6th
Hansard Link

Government Orders

“...s with a huge infrastructure deficit. We are looking at the world environment, a period of very low interest rates. Every expert who came to the finance committee encouraged the governing party to invest in infrastructure to take advantage of the low interest rates currently in effect, basically globally, and to use this opportunity to invest in Can...”

Shaun Chen (Liberal)

December 5th
Hansard Link

Government Orders

“...ll as clean water, and the expansion of trade and transport.

Now is the time to invest, while interest rates are low and Canada's debt-to-GDP ratio is the lowest of any G7 country. Over the next...”

Dave Van Kesteren (Conservative)

December 5th
Hansard Link

Government Orders

“...o to traditional rates. Can members imagine, if we are paying at this point about $35 billion on an interest rate at 2%, if that were to spike to 4%, 6%, or 8%? Some of the younger folks here are surp...”

Alistair MacGregor (NDP)

December 5th
Hansard Link

Government Orders

“...ow do they compare with what the government could offer or what the government did promise with low interest rates?”

Peter Fonseca (Liberal)

December 5th
Hansard Link

Government Orders

“... 12 years. Canada, like the rest of the world, has realized that monetary policy, including the low interest rates that we find ourselves with now, is no cure for sluggish growth. It cannot fix everything. These needed investments are not necessarily made because of the low interest rates. That is why, with government intervention, we are able to get some of that needed in...”

Alexandre Boulerice (NDP)

December 5th
Hansard Link

Government Orders

“...idends.

Why will we guarantee this bank a return or a profit of 7% when we could borrow at an interest rate of 2%?”

Alistair MacGregor (NDP)

December 5th
Hansard Link

Government Orders

“...tolls and user fees to ordinary Canadians and residents. That goes way above and beyond the kind of interest rates that Canadians were hoping for when the federal government can use its borrowing power at extremely low interest rates to finance these kinds of capital projects. That is a far cry from the 7% to 9% that ...”

Linda Lapointe (Liberal)

December 5th
Hansard Link

Government Orders

“...adians and those who need it most. Today Canada has the lowest debt-to-GDP ratio in the G7, and our interest rates are at all-time lows. Now is the perfect time for Canada to invest in its own future ...”

Linda Lapointe (Liberal)

December 5th
Hansard Link

Government Orders

“Madam Speaker, I thank my colleague for his question.

As I said in my speech, interest rates are at record lows. Now is the time to invest in infrastructure, in order to pave the...”

Linda Lapointe (Liberal)

December 5th
Hansard Link

Government Orders

“...Speaker, I thank my colleague for his question.

As I said earlier, now is the time to invest. Interest rates are at record lows. Now is the time to invest and do what has been neglected for seve...”

Joël Lightbound (Liberal)

December 5th
Hansard Link

Government Orders

“... Louis-Saint-Laurent and other members of the Conservative Party for running deficits. We know that interest rates are at historic lows, that the IMF and the World Bank recommend that we invest and run deficits precisely when interest rates are low and when there are pressing needs in infrastructure, as we see from coast to coast to coast in Canada.

It is a bit surreal to hear the Conservatives criticize us for running deficits when, for eight consecutive years, they did not table a single budget that was in the black. The budget was in the red every year and they keep telling us without fail that they had to invest in that way because of the financial crisis in 2008.

First they invested because they were told to, it was an important thing to do to stimulate the economy. It was the right thing to do at the time. One of the main reasons we fared so well in 2008 after the financial crisis in Canada was precisely because the previous Liberal government, that of Paul Martin and Jean Chrétien, refused to regulate our financial industry, which is what the Conservatives wanted and Mr. Harper got all worked up about in the House.

If we had listened to the Conservatives at the time, we would have ended up much worse off than we did in Canada. We did not listen to them then, fortunately, and we are not listening to them now. Thank God, we are very careful about taking their economic advice. With the $150 billion in deficit they left us, we ended up with the worst job growth in 69 years and the worst economic growth since the Second World War. When it comes to taking lessons from my hon. colleagues across the way on managing public finances and the Canadian economy, thanks, but no thanks.

One of the most important things about the budget and budget implementation Bill C-29 is that they reduce inequality. When our Conservative colleagues talk about the deficit, they say that we need to think about future generations. Were they thinking about future generations when they increased the TFSA limit from $5,500 to $10,000? No. When asked that question, even the finance minister at the time, Joe Oliver, said the following:[English]

“leave that to Prime Minister Stephen Harper's granddaughter to solve”. That is not our attitude. That is not our philosophy. We are dealing with the issues we are facing today, and doing so in a manner that is conscious of future generations.

When they raised the TFSA limit to $10,000, it is worth noting that the inventor of the TFSA, Mr. Kesselman, was against raising the limit so high. Even the Americans do not go that far. It would be the equivalent of putting this country in a fiscal straitjacket for generations to come, because of all the revenues it would be deprived of. (1835) [Translation]

One of the good things about this budget is that it cancels that increase in the TFSA limit, which, according to the parliamentary budget officer, would benefit only the wealthiest 10%. We think that most Canadians need to benefit from wealth in this country. We think that a country where inequalities are consistently being reduced is a good thing. That is exactly why we changed those policies, including the increase in the TFSA limit. They were unfair and unjustifiable from both a moral and a tax perspective.

The increase in the TFSA limit was not the only problem. There were many other tax policies put forward by the previous government that also benefited only the wealthiest 10%. Take for example income splitting. In my riding, as in most others, this would have only benefited the wealthiest 5% or 10%, not all Canadians.

Rather than forging ahead with policies that increase inequality, which is what the former government was bent on doing, we introduced the Canada child benefit. To give an example, when I was a child, I was raised by my mother in a small Quebec City apartment with my brother. She was a single mother. We did the math this summer. That would have given us an extra $1,066 per month tax free. I can say that that would have made a big difference in our lives back then, just like this is making a big difference in the lives of thousands of Canadian families today. When I am not feeling as motivated to come here to do my job, I think about the Canada child benefit and I can say that I am very proud to defend this budget, on this side of the House, because it is lifting 300,000 children out of poverty.

I would have encouraged my colleagues, whom I salute by the way, to vote in favour of such a socially progressive and revolutionary policy for Canada, but no, they voted against it, just like they voted against the middle class tax cut that benefits 9 million Canadians across the country.

They also voted against increasing the guaranteed income supplement, which helps 900,000 seniors across the country by giving them almost $1,000 more per year. That is not peanuts. When I went door to door in my riding, especially in low-income housing areas, seniors told me that their income was not keeping pace with the rising cost of living. That is exactly what we are trying to address via the guaranteed income supplement, which had not seen a significant increase in years, certainly not under the previous government. That government was more interested in the well-off, the richest 10%. That is what it did for 10 years with policies such as increasing the TFSA limit and income splitting. I am very proud that we have overturned those changes.

With respect to infrastructure investment, the IMF and the World Bank concluded that austerity in times of slow growth is not good policy, so they asked all countries to invest in infrastructure to stimulate growth and innovation. That is exactly what our government is doing by investing $180 billion over the next 12 years. We believe that our unprecedented investment will address Canada's growing infrastructure deficit and stimulate the economy.

Whether it is in public transit or social housing, we have some catching up to do in terms of investing in infrastructure. There is no better time to do it than when interest rates are low and the economy has slowed down. It is in fact one of the tools that Prime Mi...”

Neil Ellis (Liberal)

December 2nd
Hansard Link

Government Orders

“...f control. It was a construction deficit that was increasing at the time between 5% and 10%. We had interest rates that we were able to acquire at approximately 2.5% locked in. It is all about capital risk. Being a small business person myself, one of the biggest problems is obtaining capital, locked in, at an amount that could get rid of the risk.

With Infrastructure Ontario, we were able to build a plan, and our solution was a build Belleville plan. This was the second infrastructure plan to try to alleviate some of the infrastructure that was stockpiled to the city over the last 25 years.

The rationale is simple. Each year that the cost of infrastructure repairs are left and not taken care of, they increase. All of a sudden, a $300-million deficit becomes a $330-million or $340-million deficit. With infrastructure, we are not quite sure what the costs will be, so it is floating.

Coming up with a plan for locking in our capital risk, recognizing that interest rates were low, it was time to launch a plan and try to convince council that we needed to ...”

François-Philippe Champagne (Liberal)

November 30th
Hansard Link

Government Orders

“...nclude a workplace pension plan. (1605) [Translation]

An extended period of low interest rates could mean that young workers will have to deal with a lower return on their retireme...”

Randeep Sarai (Liberal)

November 29th
Hansard Link

Government Orders

“...pect to work in jobs that will include a workplace pension plan. Further, a prolonged period of low interest rates could mean that young workers will face lower returns on their retirement savings, wh...”

Tom Kmiec (Conservative)

November 29th
Hansard Link

Government Orders

“...off because the rate of return is so low, sometimes falling below 2%. That is because of record low interest rates, which are really driving this low rate of return. Also, administration fees cannot h...”

Charlie Angus (NDP)

November 29th
Hansard Link

Government Orders

“... out of school $60,000 and $70,000 in debt without the possibility of paying it off even at today's interest rate. They talk to me about housing, especially in urban areas, and the incredibly high pri...”

Pierre Paul-Hus (Conservative)

November 29th
Hansard Link

Government Orders

“...e they do not have the means to do so. Although salaries have gone up over the past few decades and interest rates are currently very low, the situation is not perfect for Canadians. That is because s...”

Daniel Blaikie (NDP)

November 28th
Hansard Link

Government Orders

“...into a bank and they will be told that if they have $25,000 instead of $5,000 they can get a higher interest rate on their savings account. That principle continues to apply, and those returns continu...”

Gabriel Ste-Marie (Bloc Québécois)

November 25th
Hansard Link

Statements by Members

“...nce of a class action suit ever being filed by small investors who are being ripped off with feeble interest rates on their savings and exorbitant interest rates on their loans. This is setting us back 50 years.

This government did not learn...”


The Senate

Hon. Pierrette Ringuette

May 16th
Hansard Link

Criminal Code Bill to Amend—Second Reading—Debate Adjourned

“moved second reading of Bill S-237, An Act to amend the Criminal Code (criminal interest rate).

She said: Honourable senators, today we are beginning second reading of Bill S-237, which amends section 347 of the Criminal Code. I wish to remind my colleagues that this is in fact the third time that I have introduced this bill. In the recent past, the Conservative government leaders in this place used the Senate rules to avoid passing this bill.

Section 347 of the Criminal Code sets an annual criminal interest rate of 60 per cent for all transactions. My bill, Bill S-237, reduces that rate to 20 per cent above the Bank of Canada's rate, which is currently 0.5 per cent. The new criminal interest rate of 20 per cent plus the 0.5 per cent Bank of Canada rate will apply to credit advanced for certain purposes, such as personal, family and household purposes, as well as not-for-profit organizations.

[English]

In addition, the bill recognizes the need for flexibility for loans for businesses and commercial purposes. Let me elaborate on the business and commercial loans aspect of the bill.

In developing this bill and during our debate last Parliament, it seemed clear that for small business loans, those under $1 million, that the system is working pretty well and there is no need to change the rate of 60 per cent. This allows businesses some flexibility in negotiating short-term loans while maintaining reasonable protection for small businesses.

There was some discussion about lowering the ceiling for small business loans, and I am open to debating this issue during the committee process.

For loans of over $1 million, large business loans, our research and discussions with stakeholders led us to the conclusion that larger entities have the ability to fully negotiate appropriate financing for their needs and that eliminating the cap of 60 per cent would provide more freedom for loans requiring high interest rates, such as bridge loans.

Jennifer Babe of the Uniform Law Conference of Canada, who appeared before the Banking Committee on May 6, 2015, said that "Having the million-dollar cap in is beneficial to businesses."

I'll give a brief refresher for the chamber on the history of the interest rate caps in Canada leading up to the establishment of the "Criminal Interest Rate," section 347. It goes back to 1906. It was the Money-Lenders Act, with 12 per cent on loans of $500 or less.

Jump to 1939, 33 years later, and it was replaced with the Small Loans Act, with loans of $500 or more. Then it was increased to $1,500, where limited, with an interest rate of 1 per cent a month. If they wanted to charge more than that, they had to apply to the federal government for a licence for each loan.

Jump again to 1981, the year that section 347 was enshrined in the Criminal Code with a rate of 60 per cent, and this has stood as the law for 36 years. So it's long overdue to be reviewed.

Records related to discussions around the setting of that rate are unavailable, but we can assume that they had their reasons at that specific time. For instance, in the 1980s, the Bank of Canada rate was 21 per cent. The criminal rate was set at three times that percentage. Today the Bank of Canada rate — that is, the overnight rate — is half a per cent. That would mean that the criminal interest rate would be, in relation, 1.5 per cent, given the same relation as in 1981.

Now, I'm not advocating a rate of 1.5 per cent. Even my skeptical mind can believe that you can't give out loans at that rate. I'd love that, but it's kind of mission impossible.

I'm advocating for a reasonable rate of 20 per cent above the bank rate, so currently it would stand at 20.5 per cent. That would be the criminal interest rate in the Criminal Code of Canada.

By tying this rate to that of the bank rate, the criminal interest rate would be flexible to the changing economy and monetary policy.

One of the criticisms of this bill is that the Criminal Code is the wrong place to seek remedy on unreasonable interest rates. I would respond, firstly, by stating that this is where it is in the law. I do not wish to overhaul our system of law but just to make the limits more reasonable.

Secondly, on the matter of criminalization of loans, I shall refer to the comments again of Jennifer Babe of the Uniform Law Conference of Canada. She noted that the Crown uses section 346 to go after extortion and said, "The Criminal Code, in 347, triggers civil litigation where parties to contracts declare that portions of their contracts are illegal and, therefore, not enforceable."

Of the Supreme Court cases involving section 347, they all refer to contract law. In its three decisions in the last 10 years on section 347, none were about crime but about contract enforcement.

Bill S-237's changes to section 347 are not about criminalizing loans but to reign in outrageous interest rates.

I want to take a brief moment to address payday loans. In 2006, there was a carve-out for a specific financial instrument, that is to say, a loan of $1,500 or less for a term of 62 days or less. That was the only financial instrument or product, should I say, that was carved out of the Criminal Code if the provinces wanted to be licensed to regulate payday loans in their province. Therefore, any other loan outside of that specific financial product is subject to the 60 per cent interest rate within the Criminal Code.

This bill will not change those specific financial instruments or the related provincial regulations. I have issues with that, but that is another discussion for probably another day.

Why do we need to reign in interest rates? The first question is this: Do we, the federal government, have the authority and responsibility to regulate interest rates? Clearly that has been the position of previous governments for over 100 years, considering the history of the criminal interest rate within our statutes as mentioned earlier.

Including the payday loans issue in 2006, it is clearly the case that the federal government, Parliament, has authority over interest rates in general given that payday loans required and were given a very specific carve-out from the Criminal Code, but every other interest rate remains under the federal Criminal Code.

(1450)

Now let us look at the Constitution under the heading of "Legislative Authority of Parliament of Canada." Section 91 of the Constitution Act lays out the legislative powers of the federal government, Parliament, and at No. 19 you will see the issue of "Interest." I would also point out that the list includes No. 15, "Banking," and No. 14, "Currency."

Visa — the credit card company — documents and representatives have referred to credit cards as digital currency. Tim Wilson, head of Visa Canada at the time, said in an op-ed for The Globe and Mail on March 1, 2010:

These cards - or digital currency - have made our lives better - not just by making transactions smoother, but by prying open whole vistas of economic opportunity.

One has to wonder who profits from this huge vista of economic opportunity.

Credit cards are being used more and more. As noted, they are becoming a digital currency. As our economy is more entangled with credit cards, we have increasing credit card debt. This is the trend that should concern us.

In 2016, 89 per cent of Canadian adults had at least one card, with an average of 2.2 cards per Canadian. The total number of cards has gone down, but spending and transaction volume has continuously gone up.

In 2015, according to the Canadian Bankers Association, net dollar volume for Visa and MasterCard reached $421 billion, and that is for one calendar year. It was a 5.5 per cent increase from the previous year, and over the last five years it was a 36 per cent increase.

Transactions processed have increased to 3.9 billion, a 6.5 per cent increase from the previous year and a 45 per cent increase over five years.

But we are not just talking about credit cards. Bill S-237 applies to all loans for individuals, households and non-profit organizations.

We have seen many stories over the years about extremely high interest rates, with the proliferation of instalment loans and line-of-credit-type products with very high rates. These financial products are not within the scope of provincial regulations. They are under the scope of the Parliament of Canada, and they are under the Criminal Code.

For example, a retired farmer in Manitoba took out a $100 loan for 13 days. He had to pay $133.18. That is a 925 per cent interest rate. The payday loan limit in Manitoba would have been $17. There was a class-action lawsuit against this particular company in Manitoba and in Ontario, where it operates, and it took four years to settle.

The Toronto Star reported last year a company offering caregiver loans that resulted in effective interest rates of over 200 per cent.

Another example that recently caught the eye of the Financial Consumer Agency of Canada is secured loans offered by credit repair companies. They call your house. They say, "If you have credit card debt, we can help you." I know. I got the call at my house. These are offered under the guise of rebuilding credit, but according to a Global news report, fees and interest reached 50 per cent. This case falls under the current limit of 60 per cent.

Even if we're outraged about that 50 per cent interest rate, we can't do anything because the Criminal Code says it's okay up to 60 per cent. But at 60 per cent, then it becomes criminal; so you can charge 59.999.

Should someone who has to rebuild their credit have to pay a 50 per cent interest rate?

By lowering the criminal interest rate, we can send a strong message that profiteering off the financially vulnerable of our society will not be tolerated.

Annualized interest rates charged by phone and cable companies are often in excess of 42 per cent. For example, I have seen Bell charge 3 per cent a month, which is 42.5 per cent annually, and Rogers charge 2 per cent a month, which is 26.8 per cent annually.

Now some may be worried about the bottom line of financial institutions, so let's look at bank profits in the last quarter.

RBC, per quarter, not on the year, $3 billion, up by 24 per cent from the previous year; Scotiabank, $2 billion, up 10 per cent; BMO, $1.5 billion, up 39 per cent; CIBC, $1.4 billion, up 43 per cent; National Bank, $500 million, up 90 per cent, but it includes an equity interest writeoff of the previous year.

I don't foresee a dismantling of our financial system if we limit interest rates to a reasonable amount.

As I stated before, the Bank of Canada rate has fallen drastically over the years, but the interest rates charged on credit cards, utility bills and other loans have remained largely stagnant and even increased.

While Canadian financial institutions substantially increase their profits year after year, Canadians' debt is at an all-time high. The household debt-to-income ratio is $169.4, a 23 per cent increase from 10 years ago.

Non-mortgage debt for Canadian households in 2016 was $21,912, an increase of 2.18 per cent over the previous year.

Credit card debt per borrower is $4,094, a 2.3 per cent increase from the previous year. There was also an increase in the delinquency rate, non-payment over 90 days, to 4.2 per cent, an increase of 3.2 per cent over the previous year.

Consumer debt levels in Canada are so high that, along with record housing prices, Moody's downgraded the credit rating of Canada's big six banks just last week.

Placing reasonable limits on interest rates is not a novel idea. Our capitalist neighbours to the south have limits in 18 states. Many include variable rates based on the Federal Reserve rate of the T-bill, with maximums generally in the mid-teens to the low twenties. But some go further. For instance, Minnesota has one of the tightest usury laws in the country, with a limit of 8 per cent. Over 15 states hit below the rate prescribed in my bill.

(1500)

I am sure every one of you has heard stories from family and constituents about the struggles with debt that everyday Canadians face.

At issue here, I believe, is the problem of the debt cycle. The highest rates are reserved for those who can least pay them, and so they go further and further into debt and are further unable to pay. Sometimes people are hit with unexpected expenses or life situations and have to take out loans out of necessity.

These are not all cases of people living beyond their means, but people suffering hardship, and we let businesses charge excess interest on that hardship.

A very recent survey by accounting firm MNP showed that more than half of Canadians are $200 away from being unable to pay their bills and debts. For 10 per cent, it's less than $100. That's a very small margin of error. This is not being unable to buy a bigger TV, like some would say, but paying necessary expenses. Something goes wrong with the transmission in your car, and you have to get a loan; a leaky roof, a loan; a sick child, a loan to buy prescription drugs. Things can happen to any of us. Then they are in more debt, and the debt spiral begins.

[Translation]

Unfortunately, too many companies only target clients in this type of financial situation. Some of you may be wondering why we should dwell on these people who are so far in debt. My response is that it is clear that debt has an adverse effect on our economy, an impact on our common financial stability. This was clear last week when Moody's downgraded the credit ratings of our Canadian banks.

Furthermore, when someone can't pay for basic necessities such as food, housing, and so forth, taxpayers end up footing the bill through various social programs.

[English]

Unfortunately, many companies are specifically in the business of targeting those in this situation. At the end of the day, we are all vulnerable to the effects of high interest rates.

It is time to limit the interest companies' charge to what should be reasonabl...”

Hon. Elizabeth Marshall

May 11th
Hansard Link

Families, Children and Social Development Canada Mortgage and Housing Corporation

“...We have known for a while that household debt is at an all-time high and is increasing. Interest rates are low, encouraging people to borrow. In fact, the government itself is addicted to low interest rates as evidenced by their large deficits. We also have the situation at Home Capital Grou...”

Hon. Elizabeth (Beth) Marshall

March 29th
Hansard Link

Appropriation Bill No. 5, 2016-17 Second Reading

“...low of $13.6 billion in 2015-16, a reduction of a full $1 billion.

While lower and decreasing interest rates and interest costs on market debt over the past number of years has been positive, it also demonstrates the vulnerability of the government's bottom line should interest rates increase. Interest rates have risen in the U.S. and the expectation is that interest rates will rise in Canada, probably next year if not sooner, and this could have a major ne...”

Hon. Pierrette Ringuette

March 9th
Hansard Link

Criminal Code Bill to Amend—First Reading

“introduced Bill S-237, An Act to amend the Criminal Code (criminal interest rate).

(Bill read first time.)”

Hon. Wanda Thomas Bernard

March 8th
Hansard Link

International Women's Day Wednesday, March 8, 2017

“... colour, to see her face integrate
Canadian currency. Partisan
Of Justice, ponder her interest rate
From two cents to ten dollars, an increase of 50,000%.
Also Note, her Royal...”

Hon. Howard Wetston

February 8th
Hansard Link

Speech from the Throne Motion for Address in Reply—Debate Continued

“...l regulation. That being said, however, we were not immune. Low growth, higher unemployment and low interest rates have had a profound impact on the real economy.

The financial crisis revealed t...”

Hon. Tony Dean

December 12th
Hansard Link

Canada Pension Plan Canada Pension Plan Investment Board Act Income Tax Act Bill to Amend—Third Reading—Debate Adjourned

“... to work in jobs where retirement benefits are offered by their employers. And if the current low interest rate environment persists, their savings might also grow more slowly than previous generat...”

Hon. Pierrette Ringuette,

December 12th
Hansard Link

Banking, Trade and Commerce Motion to Authorize the Committee to Study the Operations of the Financial Consumer Agency of Canada, the Ombudsman for Banking Services and Investments and the Chambers Banking Ombuds Office—Debate Adjourned

“... Banking, Trade and Commerce and in the context of various bills, including one to reduce usurious interest rates, which are now capped at 60 per cent in the Criminal Code. Seven times, I have intro...”

Senator Dean

December 2nd
Hansard Link

Canada Pension Plan Canada Pension Plan Investment Board Act Income Tax Act Bill to Amend—Second Reading—Debate Adjourned

“... the future needs of Canadians in a world of challenges, declining workplace pension coverage, low interest rates and market volatility. Their solution is effective because it focuses available reso...”


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